The crude oil price is back at the highs after bouncing from the $60 level at the start of May. Now the June is about to begin, the price of oil meets resistance at $68, fueling suspicions of a possible double top.
A move and a daily close above $68 should trigger more strength on the crude oil price, as the consolidation during the last two months will be interpreted as a continuation pattern. On the flip side, a rejection from the $68 would put pressure for a move back to the $60 area.
Supply and demand, crucial for the price of oil, is improving West of Suez but deteriorating East of Suez. For example, oil demand in Japan fell 9.1% in April when compared to the same period in 2019 (we can skip 2020 because the world was in lockdown due to the COVID-19 virus). Also, speaking of the virus, India, Malaysia and Vietnam are under total or partial lockdowns, thus affecting the demand for crude oil.
In the meantime, the OECD has released its latest outlook. It now sees the US growth at 6.9% in 2021, up from 6.5% seen in March. Also, the Euro area growth outlook improved, up 4.3% from the previous 3.9% in March.
Crude Oil Technical Analysis
Bulls may want to go long on a daily close above $70, setting a stop at the previous higher low and setting a take-profit by using a risk-reward ratio of 1:2.